The Office of Fair Trading has found there is no need for greater regulation of the supermarkets and ruled out the introduction of an ombudsman in a report on the 29 responses it received to its invitation for comments on the findings of the code’s compliance audit report in March.
“Without clear evidence that the code is not working, or that competition in the market is being restricted or distorted, the OFT does not have grounds to refer the market to the Competition Commission or to launch a new market study,” the OFT stated in its report. “It will continue to encourage the use of the code and work with supermarkets and suppliers to improve its practical usefulness.”
While retailers have welcomed the findings some suppliers are angered and have branded this latest report “a whitewash.” The National Farmers Union, however, is occupying more neutral ground. “We know a climate of fear still exists,” Kevin Pearce head of the union’s food chain and farm policy told the Journal.
But the National Farmers Union of Scotland said “the whole investigation stinks”.
The Scots complained they had told the OFT that it will never receive on-the-record complaints from suppliers of unfair supermarket trading practices if the code does not offer any protection to those who complain.
The fear of losing supermarket contracts as a result of complaining is so widespread the code is never used by its members, said the union. “I am astonished that the OFT can continue to claim there is no evidence that the supermarket code needs changing and the market is working well for consumers,” said NFUS president John Kinnaird.
“We sent them exactly that evidence, but again, the OFT has chosen to ignore it because we didn’t put the names of the companies suffering in our evidence.”
Pearce added: “...there is some welcome acknowledgement from the OFT that it does have a role to play not just in monitoring the code but also informing suppliers and encouraging them to use it. It does not give a clean bill of health to the retailer-supplier relationship either and there are blunt comments about the need for written records.”
British Retail Consortium director general Kevin Hawkins, said: “The OFT’s findings confirm what the BRC has said all along - that supermarkets are observing the code but suppliers are not making use of it.”
The OFT said it would continue to work with supermarkets to ensure written records of supermarket-supplier dealings are kept. As the Journal went to press, the Fresh Produce Consortium, which made a submission to the OFT was not in a position to comment.
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